The Jiuxi (Western Jiuquan) Basin, located in the west of the Hexi Corridor, NW China, is a foreland basin which has been active since the Early Jurassic. It was formed as a consequence of the progressive northwards migration of the North Qilian thrusts in response to sinistral shearing along the 2,000‐km long Aerjin (Altun) Fault. Sedimentary deposits in the basin are controlled not only by foreland loading and thrusting, but also by the development of listric normal faults at high angles to the thrust belt. At the junctions of these two sets of faults, thick organic‐rich sediments and reservoirs have accumulated.During the Tertiary and Quaternary, thrusts propagated along the foot‐wall of the North Qilian Fault, truncating earlier‐formed oil pools and source‐rock layers and thereby causing great difficulties for petroleum exploration. A basin development model is proposed in this paper from cm integrated study of sedimentary fades, drilling and seismic data, structural analyses and cross‐section reconstructions.The average northwards movement in the frontal zone of the North Qilian Mountains since the Pliocene is estimated at about 8 mm/yr. Therefore, about one‐half of the Jurassic‐Cretaceous oil‐bearing basin could be buried beneath the Laojunmiao and North Qilian Marginal Faults, and is virtually untouched by drilling.Source rocks in the basin are black, lacustrine shales of Late Jurassic through Early Cretaceous ages, with a maximum thickness of up to 1.2 km in the Qingxi Depression. The generation of liquid hydrocarbons began in the Late Cretaceous or mid‐Oligocene; seven stratigraphical reservoirs, ranging in age from Silurian to Miocene, are described — anticlinal. fault‐ and “buried‐hill” structures are the most important traps.The petroleum potential of individual depressions is discussed, and suggestions for potential regional oil prospects are made.